Home Down Payment Information & Benefits

Are you looking for home down payment information when beginning your path towards home ownership? You're wise to learn as much as you can about what's necessary early in the process. Read through the mortgage down payment information we have below and be sure to reach out with any inevitable questions you may have.

Just like any financial decision, there are positive and negative aspects of down payments. The situations in which down payments are required are as varied as the financial situations of borrowers. Learn more home loan down payment information, the benefits and drawbacks of making a down payment in many common situations and more below.

What is the biggest down payment myth?

Myth: It is necessary to put a full 20% of the value of your home down to qualify for a mortgage.

Fact: Some government backed programs (such as the FHA loan) allow borrowers to purchase a home with as little as 3.5% down. There are even government backed loan programs such as VA Loans and USDA Loans that require no down payment for some borrowers. While a larger down payment can lower future monthly payments, a 20% down payment is not always a requirement for home buyers.

When should or shouldn't I make a down payment?

Many home loan down payment benefits require a borrower to be in a strong financial situation to be felt. For many families one of the best ways they can build a stronger financial future for themselves is through investment in their own home. Particularly in areas where rent is more expensive than home ownership, paying a hefty down payment up front is not as financially damaging as staying in the family's current situation. However, loans with low down payments can require expensive private mortgage insurance until the loan to value ratio gets to 80%. One downside to government backed loans such as VA Loan that allows for 0% down and no private mortgage insurance is that the home contains no equity and every dollar borrowed is a dollar that will require interest payments later.

About US Mortgages

US Mortgages has been helping Coloradoans improve their financial situations for over 20 years. If you have any questions reach out online, </about-us/contact-us-mortgages> or give us a call.

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Consumer credit may affect LTV & APR. APR calculations based on 300K loan amount except for jumbo loans. APR on FHA loans require 10% down payment or Equity and min credit score of 740 is required for best rate. APR for 30y fixed rate requires current loan to be FHA insured and endorsed prior to 06.01.09. Loans for borrowers with lesser credit scores all the way down to 550 can be considered for approval with increased fees, rates and or documentation dependent on credit score. Available for owner occupied 1-2 family residential properties only and full documentation of income is required unless its a refinance of a current FHA loan, then employment is verified but income and appraisal is not required. Max loan amount is $417,000 on conventional and conventional loans listed above require 20% down payment and or equity and 740 score for best rate. Loan limit varies for FHA loans by state and county. Rates slightly higher for: Jumbo's, non owner occupied and investment properties and second homes. Rates and programs subject to credit approval and subject to change. Regulated by the CO Division of Real Estate. Equal Housing lender NMLS#392126